My Word: John L. Evans Jr.

What they think - My word

December 12, 2008

I think we need to come up with another word for "pride."

Pride definition No. 1 is a wonderful phenomenon. It's what we feel when our child treats another child well. When our grandchild performs in a play. When our alma mater makes a medical breakthrough. Good stuff, all of it.

Pride definition No. 2, regrettably, does a first-rate job of suggesting what is at the heart of our substantial financial infirmities. It's a dastardly human phenomenon, invisible and odorless, creating immeasurable damage via self-indulgence. The worst part of it: The moment you think you have it licked, it has won again.

Do you know of another word in the English language that at once signifies the best and the worst of the human experience? Ergo the need for a permanent replacement word, perhaps for No. 2.

So many in the financial-services world were animated by an amplitude of the latter definition of pride. That is, they couldn't see how they were operating. They couldn't know that the decisions that were being cast were stemming from a burning desire to make more money and appear acceptable by the norms of our decaying culture.

Alas, the predatory lender would find such a characterization utterly objectionable, as she rushed to "close another deal" on an unsuspecting and uninformed borrower. That deal to the unqualified borrower then splashed into the of toxic assets via the fancy tonic of securitized debt. We all now get to pay for these transactions.

What's more, her "pride" was reinforced as she received a bonus from her complicit sales manager for doing the deal. That pride kept her temporarily blind.

Deep down, however, she knew.

As Upton Sinclair stated, "It's difficult to get a man to understand something when his job depends on not understanding it." Or as Roger Fisher, founder of the Harvard Program on Negotiations, told me, "Know thy assumptions."

Once I observed with horror a financial-services sales executive from a rapidly growing firm say out loud before calling a client: "Time to turn on the lie machine." Ghastly, indeed.

Such is our plight. Countless, complicit folks in the financial industry -- from Wall Street moguls to your friendly regional banker -- are experiencing wisps of emotional discomfort from their activities in the financial marketplace. Like no other time in our republic's history has there been a greater need for thorough cleansing of our financial engines and renewal of participants' purity and constancy of purpose. Pride must be managed lest Rome burns again.

Steve Forbes, world-renowned financial publisher and presidential candidate, recently quipped, "You can make more money giving advice than by following it." The reason the line gets laughs is because, like any funny joke, there's a dimension of truth.

Let's hope for clear-eyed renewal with a new administration, whereby markets are allowed to work their wonders, cleaner this go-round. And though we'll never conquer definition No. 2 of pride, may we grow in awareness of its pernicious consequences.